Credit cards play a significant role in your financial life—from establishing credit and determining your buying power to potentially being a financial lifeline during times of crisis.
Before you add another credit card to your wallet, you should consider your buying habits and financial strategies. The answers to the following five questions may help you decide if another credit card is right for you.
New Cardholder? Wait a Year
If you’re a new cardholder, try holding off for one year before applying for another credit card. It can take six months to a year for your card usage to affect your credit score.
Without an established credit history, it may be difficult to get lenders to extend you credit. A short credit history can also impact your interest rates, keeping them higher than desirable. If you’ve had your credit card for less than a year, getting a new one may not be the best choice right now.
What to Do
Be patient. Use your current credit card on a regular basis and pay on time and in full each month. Your payment history is the largest factor that determines your credit score. When you do apply for a second credit card, the lending company will see how responsible you’ve been. They will then be more likely to extend you credit with a lower interest rate.
Trying to Build Credit? One Card May Be Enough
If you want another card because you’re trying to build your credit, one card may be enough. The most important part of building credit is using your existing accounts wisely—not adding more. Two cards could improve your credit utilization ratio, as long as you don’t rack up debt on either card. And if you don’t plan on actually using your second card, keep in mind that some credit card companies have a policy of canceling credit cards due to inactivity—and a canceled credit card can cause your credit score to take a dip.
What to Do
Instead of getting a second card, focus on using your current cards more effectively. Pay your balances on time and in full to help improve your credit score. If you’re ready to open a new type of account to increase your account mix, consider a small personal loan.
Already Have Multiple Cards? Review Your Payments
It may be tempting to have more spending power at your disposal, but before you apply for another credit card, make sure you can financially handle it. Examine how you’re currently managing your credit cards.
Are you struggling to pay the minimum each month? Are you unable to make payments on time? If you answer “yes” to either of these questions, it’s probably not a good idea to apply for another card right now.
What to Do
If you’re already having a hard time paying your credit card bills, ask yourself why you think you should get another credit card. Is it because you’ve already maxed out the cards you have in use? Don’t open yourself up to more debt by opening another line of credit.
Instead, develop a plan to lower your current credit card balances and create a budget to help organize and control your spending. A balance transfer credit card may be a solution if you’re looking to consolidate your debt into one, easy-to-track payment plan.
TD Cash Credit Card
- Earn $150 Cash Back when you spend $500 within 90 days after account opening
- Earn 3% Cash Back on dining
- Earn 2% Cash Back at grocery stores
- Earn 1% Cash Back on all other eligible purchases
- $0 Annual Fee
- $0 Foreign Transaction Fee
- Visa Zero Liability
- Instant credit card replacement
- Digital Wallet
- After introductory period, balance transfer APR will be 12.99%, 17.99% or 22.99%, based on your creditworthiness
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Running a Balance? Check the Interest Rates
Carrying a balance from month to month can affect your credit score by increasing your utilization rate. It can also put a big dent in your wallet depending on your interest rates. If you regularly make your monthly minimum payments but keep a balance, it could be beneficial to get a new card with lower rates—as long as you can use it responsibly. If you want to keep your old card active, split the same amount of spending between the two cards, rather than doubling your spending, and your utilization rates and fees could go down.
What to Do
Check the interest rates on your current card. If you’ve been keeping up with your payments and your overall credit score is good, you could qualify for a better interest rate to replace this one with. While some credit cards may hit everything on your perk and benefit checklist, if the interest rate is too high, skip it. Look for credit cards with low interest rates that will be sustainable for long-term use.
Got Excellent Credit? Try a Rewards Credit Card
If you have established excellent credit, you may be receiving offers from a variety of credit card companies. If you know that you can financially handle another credit card and are looking to take advantage of the many perks and rewards available, you may want to consider applying for another credit card.
What to Do
Before you move forward, do your research on each one. Don’t get taken in by flashy offers that won’t benefit you in the long run. The best perks and rewards are the ones that suit your lifestyle. Decide which are most important to you and would give you the most bang for your buck.
Chase Sapphire Preferred® Card
- Earn 60,000 bonus points after you spend $4,000 on purchases in the first 3 months from account opening. That's $750 toward travel when you redeem through Chase Ultimate Rewards®
- 2X points on travel and dining at restaurants worldwide & 1 point per dollar spent on all other purchases.
- Get 25% more value when you redeem for airfare, hotels, car rentals and cruises through Chase Ultimate Rewards. For example, 60,000 points are worth $750 toward travel
- Get unlimited deliveries with a $0 delivery fee and reduced service fees on orders over $12 for a minimum of one year on qualifying food purchases with DashPass, DoorDash's subscription service. Activate by 12/31/21.
- Earn 5X points on Lyft rides through March 2022. That’s 3X points in addition to the 2X points you already earn on travel.
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Ready to Apply? Go for It
Once you’ve learned how your charging and payment habits can affect your credit score, you can determine if and when the time is right for you to get another credit card. Our Credit Card Finder makes it easy to find the best card for your needs.